Massachusetts Mutual Life Insurance Co. has lost its AAA rating by Standard & Poor's, due to the value decline in its asset management units.

The 158-year-old firm's credit and financial strength ratings dropped to AA+ "because of its lower quality of capital and reduced financial flexibility," S&P said.

MassMutual lost $1.1 billion last year, largely due to investor defections after a 29% drop in bond funds in 2008, Bloomberg News reported.

Furthermore, the value of MassMutual's subsidiaries has been depressed lately, weakening the quality of the capital base, S&P said.

"While we are disappointed that our rating has been revised ... it is important to note that MassMutual maintains among the highest financial-strength ratings of any company in any industry," a MassMutual spokesman said.

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